Experts have estimated Russia’s losses due to trade wars with Turkey

Russia has lost $1.3 to 1.5 billion from duties on supplies of grain to Turkey, introduced in response to the import ban on Turkish tomatoes to Russia. These data are presented in a report (.pdf) jointly prepared by the experts of the Gaidar Institute and the Russian Academy of national economy and public administration (Ranepa).

The “trade war” with Turkey freed a niche in Russia for local producers of tomatoes and cucumbers with a capacity of half a billion dollars, experts say. The authors of the report indicate that the imported Turkish tomatoes, which occupied 43% of all imported tomatoes in Russia has cost the Russian buyer cheaper than domestic.

Russia imposed a food embargo against Turkey after the November 2015 Turkish fighter jets shot down a Russian su-24 bomber, which carried out a combat mission in Syria. Despite a gradual warming of relations with Turkey in the summer of 2016, which has led to a gradual lifting of the embargo on certain goods (citrus, stone fruits, onions, cauliflower, cloves, and broccoli), an embargo on tomatoes preserved, the authors of the report.

“Turkey persistently asked to lift the ban, but the Ministry of agriculture of the Russian Federation, based on the fact that the program of import substitution has already been funded by the government and business, the request was rejected,” reads the report.

Only by calculations of experts of the Gaidar Institute and Ranepa, the total cost of the state and business on the program of import substitution amounted to 34.2 billion rubles. the dollar exchange rate of 60 rubles per dollar, this amounts to approximately $570 million

In mid-March 2017 Turkey refused Russia’s duty-free import of Russian grain, corn and sunflower meal. The tax rate was 130%, which in fact is the termination of deliveries of Russian grain to Turkey, said the General Director of the Institute for agricultural market studies (IKAR) Dmitry Rylko.

Deputy Prime Minister Arkady Dvorkovich previously admitted that Russia may develop a response to Turkey if they will continue to hinder the delivery of Russian goods, but expressed the hope that “common sense” will prevail. According to him, Turkey and Russia hold regular consultations on trade in agricultural products.